What is your aviation insurance plan? Most aircraft owners spend eleven months of the year thinking about insurance only when they need a certificate for the airport or the bank, or need to have the airplane flown by someone other than the regular pilot(s). The twelfth month is spent hoping that the premium will go down – or at least not go up very much. When they get the renewal quote, they mope around for a few days, beg their agent for some relief – and then pay (or finance) the bill, go to training and move on with their lives. This is not really a good plan, but is it how you buy insurance?
Ask yourself the following questions, with your aircraft operation in mind. Hopefully it will stimulate some thinking about the way you have approached the purchase of aviation insurance.
How did I select my broker? Do I know his/her strategy for marketing my annual renewal? What insurance markets does he/she represent?
Does my broker know my story? Have I provided him with all the information that he needs to build a package for me? Does he know my business? Does he know my flying background? My aircraft ownership goals and plans? Have I tasked him with assembling an insurance package designed around my plans, or do I just demand the lowest price every year – strategy be damned?
Have I presented a formal, written pilot training plan TO the underwriters, or do I just accept whatever they tell me I must do? Do I even have a formal, written training plan? How about formal safety and operations procedures? Have the underwriters seen those?
Does my policy have adequate coverage to allow rental of a substitute aircraft, if mine is in the repair shop for an extended period of time? Have I ever reviewed those limits? Did I even know they were there?
When did I last review the insured value of my aircraft? Is it insured for what I owe? Is it insured for what it’s really worth, or what it was worth three years ago?
Am I protected if my employees sue me? Is my hired pilot protected? Should he be? Is my company protected while I am flying a personal (or holding company owned) airplane on company business?
How should I handle leaseback or dry lease arrangements? Who should carry the coverage? If it’s not me, then how do I insure that I am protected? What affect does a dry lease arrangement have on the willingness of insurers to cover me? Is my broker correctly presenting the arrangement to the insurance market, or is he unnecessarily causing alarm that could affect my premium?
How does my insurer administer claims? What do they do to protect the value of my asset during and after repairs? How much will I have to spend out of pocket before I can expect reimbursement form the insurance company?
What is my plan for maintaining insurability as I age past 60 or 70 years old? Do the underwriters know this plan? Are they agreeable to it? What if I change aircraft types? Will I be able to get proper coverage from my present insurer?
If my current insurer refused or was unable to renew my coverage next year, what is my broker’s back up plan?
What happens if my FBO damages my airplane? Should I file a claim? Should I sue the FBO? Should I take their offer to repair my aircraft?
Do the aviation contracts I have signed jeopardize my insurance coverage? Has the insurer reviewed each aviation contract? Do I solicit my broker’s input during the negotiations for hangar leases, rental parts, management services, etc. or do I simply send him a copy of the contract once the deal is done?
Whether your aviation policy renews this month, next month, or eleven months from now, spend some time thinking about these questions. Make a purposeful plan for your aviation operations and risk management. Interview your insurance representative and make sure the consultant you employ does more for you than send you a quote and a few certificates each year. Make sure that you are attractive to the insurance marketplace and are buying the coverage that fits your unique situation.